Trade Balance Deficit Research Articles

STATISTICAL STUDY OF THE STATE AND DEVELOPMENT OF FOREIGN TRADE OF UKRAINE

The directions of statistical analysis of the country’s foreign trade processes are considered in the article. Possibilities of statistical methods for studying the state and the main trends that have developed in this area are highlighted. The conclusions about the intensity of the dynamics of the trade balance indicators are generalized. The processes of the outstripping development of imports over exports are highlighted. The dynamics of the balance of export-import operations is analyzed and trends of its deterioration are demonstrated. The degree of coverage of imports by exports and the processes of formation of the trade balance deficit are investigated in time. The directions of development of characteristics of the balance of foreign trade operations are studied. High levels of export and import dependence of the country have been demonstrated, which leads to vulnerability to external shocks and instability in the world. The results of the analysis of the structure and structural shifts in the trade of Ukraine with the countries of the Visegrad Four are presented. The emphasis is made on the prospects of interrelations with this group of countries from the point of view of using their experience in preparing for accession to the EU. The article demonstrates more intensive changes in the geographical structure of exports than imports and highlights the tendencies towards an increase in the role of Poland and a decrease in Hungary in the export-import operations of the Visegrad Four with Ukraine. The processes of changing the terms of trade have been investigated in terms of changes in export and import prices and in terms of changes in the physical volume of exports and imports on the example of a group of dairy products, which are widely represented among both export and import goods of Ukraine. The index method was used to analyze the absolute and relative impact of changes in prices and the physical volume of exports and imports of a number of dairy products on the value of exports and imports. Changes in the terms of trade are highlighted by constructing quantitative and price indices of the terms of trade. It was clarified that it was the sharp reduction in the physical volume of exports that contributed to the decrease in foreign exchange earnings from the export of dairy products. The necessity of measures to promote domestic goods abroad, primarily to European countries, has been substantiated. The research results can be used in foreign trade policy at the macro level.

Factors Influencing on Export Engagement of Small and Medium-Sized Enterprises in Sri Lanka: Resource Based View

Purpose: Sri Lankan government has recognized small and medium enterprises (SMEs) as the backbone of the economy. Export is the most adapted internationalization mechanism by SMEs. Export activities of SMEs are caused to reduce trade balance deficit, increase capital inflow, increase employment, create balance of payment surplus and increase the production. In the most of the developing countries, considerable amount of total export activities is performed by SMEs. However, a few numbers of SMEs are exporting in Sri Lanka. The purpose of this study is to identify the factors that influence on export engagement of SMEs in Sri Lanka.
 Methods: Explanatory research approach followed by quantitative method used in this study. Based on literature, financial capability, management capability, government policy and marketing information were selected as influencing factors on export engagement of SMEs. Scope of the study consisted with SMEs in the manufacturing sector, located in Western province. A structured questionnaire was used for the primary data collection.
 Findings: The survey was conducted on 151 SMEs. The multiple regression analysis results revealed that 72.6% of the variation in export engagement can be explained by financial capability, management capabilities and government policies. However, marketing information was not a significant determinant of export engagement of SMEs. Among the factors, management capability recorded the highest beta value (beta = 0.487) followed by financial capabilities. 
 Research Implications: This study helps to enhance the development of the country through assisting the SMEs to enhance their exports by having a better understand about the factors influence for export engagement of SMEs. The SMEs which are not engaged with export, can get a knowledge about the most important factors of the export-engaged enterprises have.
 Further Study Suggestions: Future studies might concern in depth analysis of problems face by SMEs when engaging with exports and remedies for those problems by using many sample size within a long period of time.

Challenges of soybean self-sufficiency policy in Indonesia

Indonesia deals with adverse soybean trade balance deficit as its domestic production is far below its demand. The study aims to analyze the challenges of achieving soybean self-sufficiency based on a survey in Lampung, West Java, Central Java, and West Nusa Tenggara Provinces in 2018. The special program (UPSUS) of soybean distinctively designed to achieve soybean self-sufficiency is characterized by heavily subsidized inputs, intensive practice on existing farm land area, as well as newly-planted area enhancement (PATB) on fragmented, less fertile and unsuitable land areas. Nevertheless, it results in unsatisfactory soybean production enhancement. Soybean farming is not competitive in term of farm business due to its relatively low yield and unfeasible farm-gate price. To enhance national soybean production, this crop should be grown on the suitable farm land at appropriate scale. A soybean variety resistant to insect-pests attack is mandatory to be adopted by farmers. In addition, the government needs to restructure the marketing aspect consisting of an effective floor price establishment through Bulog purchase with sufficient state budget allocation. It is also urgent to regulate soybean trade such as soybean import during off season as well as reasonable import tariff.

Uticaj deviznog kursa na trgovinski bilans Srbije

Subject of this research is contained in its title. We examined the connection and the influence of the foreign exchange rate on the foreign trade balance of Serbia as an independent state in this century, that is, in the period 2007-2017. The aim was to determine whether the theoretical paradigm applies in concrete terms, and that the decline in the value of the domestic currency leads to an improvement in the balance of payments, given the role of price elasticities of import and export demand as well as the level of domestic consumption. The SPSS software package was used for statistical data processing. The observed variables: foreign exchange foreign trade deficit, the exchange rate, the effective nominal exchange rate and the effective real exchange rate are from the point of view of the Scale type. The data were taken from official sources, primarily from the National Bank of Serbia and the Ministry of Finance of Serbia. The obtained results unequivocally confirm that in specific conditions depreciation of the dinar is favorable to the reduction of the deficit of the foreign trade balance. The basic value of this result is that such a policy should continue if the goal is to improve the liquidity of Serbia in international payments. We conclude that the policy of the exchange rate of the dinar in the observed period was properly conducted, and that within the framework of other measures of economic policy, primarily monetary and fiscal, in that sense, gave satisfactory results. In the paper itself, we first defined the basic concepts related to the types and exchange rate regimes. We have added additional conditions for the effectiveness of this policy in order to improve the balance of external trade. By testing the hypotesess we verified the validity of the initial hypotheses of the research. We concluded that the economic policy in this domain in the mentioned period was conducted with due diligence.

Questioning the Puzzle: Fiscal Policy, Real Exchange Rate and Inflation

The paper re-investigates the effects of government spending shocks on the real exchange rate and inflation, using US data. In opposition to some previous puzzling results, we find that an increase in government spending appreciates the real exchange rate and generates inflationary pressures. Positive spending shocks also induce a trade balance deficit and an increase in the nominal interest rate. The discrepancy with the existing literature lies in the identification of fiscal shocks: embedding a narrative instrument within a proxy-SVAR model is what makes the difference. Findings are robust and coherent with a standard open economy business cycle model. Our analysis suggests that proxy-SVAR models are more immune to structural changes in US fiscal policy.

China’s Official Development Assistance: An Implication of the Transport Infrastructure Development in Cambodia

China’s ODA in Cambodia had been executed since the 1950s with the remarkable evidence of the four factories’ construction in Cambodia during the 1960s, while the United States of America had also experienced providing funds to build roads and bridges and other humanitarian reliefs in Cambodia during the 1950s and 1960s. After the national election in 1993, foreign assistance was given to Cambodia to support the economic infrastructure and to fill the gap of government expenditure budgets of each year, since there was a huge amount of the trade balance deficit. China has been the largest donor and investor in Cambodia in exchange for high commitment of the country to support the “One-China Policy” and the Belt and Road initiative right after its commencement in 2013. Since then, Cambodia has received huge amounts of ODA from China in several sectors, especially the transportation infrastructure sector. This research focuses mainly on China’s ODA for transportation infrastructure development contributed to the GDP growth of Cambodia by focusing mainly on the public sector foreign aid and ignoring the private sectors (investment scheme). The researcher used a mixed-method to analyze the data collected by using Eviews 10 with the least-squares’ method to analyze the data. The research result showed that China’s ODA for the transportation infrastructure development in Cambodia significantly contributed to the GDP growth of Cambodia, with the scientific evident chance of occurrence of 99.81 percent, with only a 0.19 percent-chance of error.

The Effect of Real Exchange Rate Changes on External Trade Balance in Sudan: Testing J-Curve Hypothesis

The current research article analyzes the impact of changes in real exchange rate upon external trade balance of Sudan during the period 1978-2017. It employs Autoregressive Distributed Lag (ARDL) approach, impulse response functions and Granger causality test. The empirical findings indicate that exchange rate devaluations have no impact on the merchandize trade balance, thus evidence in favor of the J-curve pattern was not found. Granger causality test runs one-way from trade ratio to real exchange rate and not the other way. Thus, the results can be considered as an additional contribution to evidence stated in literature that focused a vibrant range of economies. These findings are appropriate for policy making in Sudan as well as in various developing countries since the focal point is major trade balance deficit.

Foreign trade relations between the Republic of Korea and the United States in the context of the development of integration processes

The article examines the process of concluding, implementing and updating the Free Trade Agreement between the USA and South Korea, highlights the main problematic aspects of the functioning of the free trade area and the consequences for the bilateral trade of countries. The study found that South Korea benefited significantly from the negotiated liberal trade regime with the USA. The trade balance surplus of South Korea with the USA sharply increased - to a historic maximum of 25 billion dollars (in 2015), also South Korean exports of high-tech goods and high value-added goods increased significantly. For the USA, participation in the agreement led to an increase in the trade balance deficit and in the export of resources, agricultural goods and low value-added products. The observed consequences led to the use of a tough discriminatory policy by the USA, to the revision of the provisions of the Free trade agreement and to the military and political concessions from South Korea. As a result, the deficit of the US trade balance with South Korea decreased by 17.3% over the year, changes in the commodity structure of the countries' mutual trade are expected. The analysis proves the formation of a unified approach in US foreign trade policy towards partner countries within the framework of Free trade agreements, which lies in the mainstream of new protectionism and aimed at ensuring American geopolitical and economic interests.

Comparative Advantage and The Product Mapping of Exporting Sector of Minerals in Pakistan

The economic policy of import and export has its both advantages and disadvantages on the economy of every state . In Pakistan, however, this policy of import and export economy often led to an unsymmetrical export portfolio resulting in the trade balance deficit. This study aims at measuring the export competitiveness of minerals in Pakistan, and the data were obtained from international trade center (ITC). Hence, a set of revealed comparative advantage (RCA) indices were employed to examine the comparative and competitive advantage of mineral sector of Pakistan for the peiod2003-2018. The results show that Pakistan had a comparative advantage in the minerals exporting sector during 2004 to 2018, while comparative disadvantage in 2003. Further, the net export index illustrates that Pakistan was a net-importer of this sector from 2003-04, whereas net-exporter during 2005-18.

أثر معدل الصرف على التوازن الخارجی للاقتصاد المصری- کاقتصاد صغیر مفتوح

تهدف الدراسة إلى دراسة تأثير سياسة معدل الصرف علي أهم الموازين الفرعية لميزان المدفوعات المصري وهم، الميزان التجاري والميزان السلعي والميزان الرأسمالي (الاستثمار). )، لقياس مدي توافق نتائج تطبيق سياسات تخفيض قيمة الجنيه المصري علي توازن الوضع الخارجي لمصر- التي کانت محفزة ومدعومة من صندوق النقد الدولي- مع ما کان مخطط له، من حيث دعم تنافسية الصادرات المصرية من السلع والخدمات وجذب الاستثمارات . وتم ذلک من خلال اختبار فرضية وجود علاقة ايجابية بين تخفيض قيمة العملة المصرية وتحسين وضع الميزان التجاري السلعي والميزان التجاري الخدمي والميزان الرأسمالي (الاستثمار. وتم الاعتماد على معادلة الانحدار المتعدد باستخدام طريقة المريعات الصغرى (OLS) خلال الفترة (1980-2019 ). وتوصلت الدراسة إلى وجود علاقة موجبة بين معدل الصرف الحقيقي وعجز الميزان التجاري السلعي، اي أن زيادة معدل الصرف الأجنبي للجنيه المصري يؤدي إلى زيادة العجز في هذا الميزان، کما أن العلاقة سالبة بين معدل الصرف الحقيقي والميزان التجاري الخدمي، حيث تؤدي أن زيادة معدل الصرف تؤدي إلى انخفاض فائض الميزان الخدمي، بالإضافة إلى أن تأثير معدل الصرف الأجنبي على وتدفقات الاستثمارات الاجنبية سالبة ايضا. وهذا يشير إلى عدم فاعلية سياسة تخفيض قيمة الجنية المصري لتحسين وضع ميزان التجارة السلعي و الميزان التجارة الخدمي وفي ميزان المعاملات الرأسمالية (الاستثمار الاجنبي. Abstract The study aims to study the effect of the exchange rate policy in Egypt on the most important balances of the Egyptian balance of payments, namely; the trade balance, the commodity balance and the capital balance (investment). ), to measure the consistency of the results of applying the policies of devaluation of the Egyptian pound on the balance of the external situation of Egypt - which was stimulated and supported by the International Monetary Fund - with what was planned, in terms of supporting the competitiveness of Egyptian exports of goods and services and attracting investments. This is done by testing the hypothesis of a positive relationship between devaluation of the Egyptian currency and improving the status of the commodity trade balance, the service trade balance and the capital balance (investment. The multiple regression equation was used using the OLS method during the period (1980-2019). The study found that there is a positive relationship between the real exchange rate and the deficit of the commodity trade balance, meaning that an increase in the foreign exchange rate of the Egyptian pound leads to an increase in the deficit in this balance, and the negative relationship between the real exchange rate and the service trade balance, as an increase in the exchange rate leads to Due to the decrease in the surplus of the service balance, in addition to the negative impact of the foreign exchange rate on foreign investment flows as well. This indicates the ineffectiveness of the policy of devaluing the Egyptian pound to improve the status of the commodity trade balance, the service trade balance, and the capital transactions balance (foreign investment

The US-China Trade War and the Economic Ripple on South Africa

This article examines the economic ripple of United States-China trade war on South Africa. Data were analysed using the paired t-test statistics for means. Results indicate that the United States suffered a significant increase in trade deficit during the first year of the US-China trade war in 2018 compared to the pre-trade war period in 2017. South Africa witnessed a significant increase in the balance of trade deficit in 2018 during the first year of the trade war. In addition, the South African currency has suffered increased volatility during this period of US-China trade war. In conclusion, the paper highlights that based on past US trade war history, the United States may suffer more losses if the current trade war continues. The paper recommends inter alia, the urgent need for the United States and China to resolve the trade impasse, and the need for South Africa to diversity its exports in order to penetrate new markets.

Socio-economic model for the operation of a solar platform for the conservation and valorization of local milk in the village of Tatki in Northern Senegal

Livestock is a strategic sector that occupies nearly 60% of rural households and accounts for 4.3% of Senegal's Gross Domestic Product (ANSD, 2016). The dairy sector plays a decisive role in this sector, given its importance in the food security of the population and the income it generates (Alari et al, 2011). However, national milk production is in deficit; the country relies on imports of large quantities of milk powder, 25,000 tons/year, to cover its consumption needs (MEPA, 2016). These imports weigh heavily on public finances, up to 60 billion FCFA/year, thus accentuating the trade balance deficit, which was 2,977 billion FCFA in 2016 (ANSD, 2018). The analysis of the milk value chain highlights, in addition to the difficulties of securing production in the dry season, the poor access to energy in production areas (Enda Energie, 2015). Thus, in these localities, the milk can neither be preserved nor processed to be valorized and allow producers to earn stable incomes. It is in this context that a milk valorization platform was installed in 2016, in the village of Tatki located in a dairy basin in northern Senegal. After two years of operation of the platform, the financial results showed real difficulties in making the business of selling fresh milk to dairy industries profitable, given the landlocked nature of the area. Indeed, the cost price is 320 CFA francs per liter, for a price proposed by the industrialist set at 325 CFA. According to economic calculations, the floor price of a liter of fresh milk should be set at 550 CFA francs, for a minimum average commercialized volume of 471 liters per day, within the framework of a concessional credit at a rate of 5%. These conditions do not correspond to the reality of the current market and could not be applied without a subsidy. Thus, in order to make the platform profitable, it seems essential to add value to the milk by processing it on site. In this regard, the production of yogurt has given very interesting results that could be replicated in other villages in the northern zone. The financial analysis of the activity, for financing at a subsidized rate of 7.5% per year for a period of 7 years and a deferred repayment of 2 years, shows a rate of return of 18% for a period of 15 years, when local milk is processed into yogurt. The wealth generated (10% NPV) amounts to 227,269,450 FCFA and the time to recover the capital invested is 3.90 years.

The Nonlinear Relationship between Trade Balance and Income for Selected Asian Economies

This research study is an attempt to explore the nonlinear relationship between domestic and foreign income and deficit in the trade balance for a sample of 13 high deficit Asian countries from 1990 to 2019. Furthermore, the study also moderates the role of financial development and carbon emissions with trade balance. The study results validated the existence of a nonlinear relationship between trade balance and domestic and foreign income. For this purpose, three different types of model are formulated. The first model was of the benchmark type, which contains only the domestic and foreign income effect, while in the other two models, the role of financial development and carbon emissions is also included. The estimated results evinced the existence of U shape relationship for domestic income and inverted U shape curve for World income. The results revealed that it would be very suitable for selected countries to boost up domestic income. Because of it, the deficit in trade balance will start to decline. The financial development and carbon emissions are found to be a significant contributor to reduce the deficit in the trade balance.

Overview of Ghana’s Export and Import, FDI inflow and outflow: Is there any connection between its trading partners and the source of its foreign investing countries?

Foreign direct investment inflows and outflows, export and import are seen as some of the major factors for transforming a country’s economic growth and development. This paper provides and evaluate literature review on importation and exportation alongside inward and outward FDI in Ghana. By considering some selected countries such China, India, the United States of America, and the United Kingdom in determining whether there is some sort of connection between Ghana’s trading partners and investing countries in its economy by the use of quantitative method. The results show that Ghana’s export values have improved rapidly over the past years with a continuous decrease in its imports. The outcome further proves that, at the initial level, export from Ghana to China, India, US and UK were of lower values and with much effort by the Ghana government to control the balance of trade deficit from these major trading partners is in the process of achieving the goal, as the country has been experiencing balance of trade surplus from China and India except in the situation US and UK. It was also revealed that China, India, US and UK are not only major trading partners, but also top investing nations in Ghana. It is suggested Ghana should increase its outward FDI and also encourages its multinational companies to embark on cross-boarder investment.

The effect of competitive ability of green beans and dry onion crops On Egyptian agricultural exports

The issue of increasing Egyptian exports is an important pivotal issue because one of the main goals of economic reform programs is to adjust the imbalance in the trade balance, which reached a deficit of about $ 40.313 billion in 2017, and the agricultural trade balance deficit contributes to this imbalance by about $ 8.193 billion in 2017. The problem of the study is that the current situation of the quantities exported from green beans and dry onions to various international markets does not achieve the best condition that maximizes the export revenue from it, despite the total agricultural exports in various markets in which Egypt has a competitive advantage, as the quantity of onion exports decreased from 457.33 Thousand tons in 2016 to 452.42 thousand tons in 2017, as well as the amount of green bean exports decreased from 24.966 thousand tons in 2016 to 13.901 thousand tons in 2017, as well as fluctuation and instability in the proportion of the contribution of green beans and dry onions in the structure of Egyptian agricultural exports, especially with the high rate of import growth Agricultural reported the growth rate of agricultural exports, which led to an increase in the agricultural trade balance of the country by about 8.193 billion dollars in 2017.

The COVID-19 multiplier effects of tourism on the Greek economy

Using a multisectoral model and data from the Supply and Use Tables, this article estimates the COVID-19 multiplier effects of tourism on gross domestic product (GDP), total employment, and trade balance of the Greek economy. The results indicate that a—not-unexpected—decrease of international travel receipts in the range of 3.5 to 10.5 billion euros would lead to a decrease in GDP of about 2.0% to 6.0%, a decrease in the levels of employment of about 2.1% to 6.4% and an increase in the trade balance deficit of about 2.4 to 7.1 billion euros, respectively.

Trump\u2019s Trade Policy, BREXIT, Corona Dynamics, EU Crisis and Declining Multilateralism

Since 1991 there has been a reinforcement of the World Market Economy, not least since China and the, then new Russian Federation have joined the World Trade Organization and because of EU Eastern enlargement and ASEAN integration deepening, while the Transatlantic Trade and Investment Partnership (TTIP) and Trans-Pacific Partnership (TPP) negotiations seemed to indicate stronger regional integration dynamics. With the Trump Administration, the situation has changed dramatically as President Trump is supportive of neither multilateralism in general nor of the EU, which is weakened through BREXIT, in particular. Trump’s focus on the US merchandise trade balance deficit is ill-placed and import tariffs imposed on China seem to be excessive as the optimum tariff rate is miscalculated on the basis of the traditional formula – while a new adequate formula would include the role of sectoral US outward FDI stocks. Asia, the EU and the US could define fighting the Corona World Recession as a global public good, but the United States is weakened in the corona pandemic crisis; the EU is facing serious problems in avoiding a Euro Crisis 2 problem and the €750 billion EU loan package could undermine the Eurozone’s stability while being inadequate to minimize the risk of a Euro Crisis 2. At the same time, the prospects for EU cooperation are declining due to political disappointment concerning the national corona pandemic policy in some member countries. An effective anti-corona pandemic policy would mean to organize a consistent EU-ASEAN cooperation or a G20 cooperation with a later extension to UN Organizations, including the IMF, the World Bank and the WHO. Post-corona, global governance could change strongly because of the long-term political scarring effects of the pandemic shock which could undermine EU and Western stability. Networked international leadership in support of multilateralism is an innovative – but difficult - option for EU-ASEAN-Mercosur.

واقع المیزان التجاری المصری مع أهم التکتلات الاقتصادیة

The research problem is that although Egypt signed many trade agreements and joined many global economic blocs that are supposed to contribute to increasing the trade flow between Egypt and these countries, the statistics indicate weak economic performance in the field of foreign trade, where the value of The total exports amounted to about $ 26.2 billion in 2017, while the value of total imports was estimated at about $ 66.5 billion in 2017, which means that there is a deficit in the total trade balance estimated at $ 40.2 billion, while the rate of export coverage of imports was estimated at 39.5%. The results showed that the markets of the European Union, the Arab countries, and the fifteen countries are the most receiving countries for Egyptian exports, as they absorb about $ 19.4 billion, equivalent to about 76.41% of the total value of Egyptian exports, which amount to about $ 25.5 billion during the average period (2013-2017). While it imports about $ 36.8 billion, equivalent to about 52.27% of the total value of Egyptian imports, which amounted to about $ 70.4 billion during the average of the same period. The foreign trade between Egypt and the markets of the European Union, the Arab countries, the fifteen countries, and the COMESA also had a positive impact on Egyptian exports, as it was found that the value of Egyptian exports increased annually by about 10.3%, 13.37%, 13% and 14.5%, respectively.

Overview of Ghana’s Export and Import, FDI inflow and outflow: Is there any connection between its trading partners and foreign investing countries?

Foreign direct investment inflows and outflows, export and import are seen as some of the major factors for transforming a country’s economic growth and development. This paper provides and evaluates literature review on importation and exportation alongside inward and outward FDI in Ghana. By considering some selected countries such as China, India, the United States of America, and the United Kingdom in determining whether there is some sort of connection between Ghana’s trading partners and investing countries in its economy by the use of the quantitative method. The results show that Ghana’s export values have improved rapidly over the past years with a continuous decrease in its imports. The outcome further proves that, at the initial level, export from Ghana to China, India, the US, and the UK were of lower values and with much effort by the Ghana government to control the balance of trade deficit from these major trading partners is in the process of achieving the goal, as the country has been experiencing balance of trade surplus from China and India except in the situation the US, and the UK. It was also revealed that China, India, the US, and the UK are not only major trading partners but also among the top investing nations in Ghana. It is suggested that Ghana should increase its outward FDI and also encourages its multinational companies to embark on cross-border investment.

ECONOMIC DEVELOPMENT ANALYSIS FOR IMPROVING PORT THROUGHPUT AND REGIONAL ECONOMIC GROWTH IN EAST JAVA PROVINCE, INDONESIA

Development of the ocean economy (particularly port) is one of the important components in improving regional and national economic competitiveness in Indonesia as an archipelagic state. East Java Province as a major contributor to the national economy has not been able to optimize the port's potential. This can be seen from the East Java 2017 trade balance which has a deficit. Whereas the Port (sea transportation sector) in East Java Province, which is one of the sectors with the second largest multiplier, is 2,178. This study aims to identify leading economic sectors that can encourage increased port throughput activities. Export activities related to the port throughput that can improve the trade balance deficit in East Java. The method used in this research is Shift Share Analysis (SSA) and Location Quotient (LQ) using secondary data from GRDP 2014 - 2018. The results of the SSA analysis show that the highest NEij, IMij, and CEij components are manufacturing (NEij = 80977.5), information and communication (IMij = 12730.5), and manufacturing industries (CEij = 25566.1). Based on LQ analysis, the basic sectors in East Java Province with LQ values > 1 are wholesale and retail trade (1.67), manufacturing industries (1.64), Accomodation and food services (1.54). The five main export commodities in the economic sector in East Java Province include agriculture (fish and shrimp, oily seeds, animal product), mining (crude oil), manufacturing industries ( jewelry, copper, wood, animal fat). The development of economic policy in East Java needs to foster comparative and competitive advantages such as investment, efficiency and technology, and minimize imported content.